Diversified Economies – The key to Africa’s growth |
By Oyinkan Adeleye, IIJD |
July 13, 2009 |
On July 11, 2009, President Barack Obama set foot on Ghana; acknowledging the African nation for its progressive leadership and model of democracy on the continent. During a speech delivered to Ghanaian legislators, President Obama, took the opportunity to chastise African leaders, informing Africans to prepare to play a role in the 21st century the U.S. president mentioned that defining oneself in opposition to someone who belongs to a different tribe, or who worships a different prophet, has no place in the 21st century. Africa's diversity should be a source of strength, not a cause for division. He encouraged leaders across the continent to build strong institutions instead of strong men, to be wary of common obstacles to development such as nepotism, corruption and warfare. The President’s overarching theme was that Africans are responsible for their own development. But he also showed the will to open US markets for trade; America can also do more to promote trade and investment. Wealthy nations must open our doors to goods and services from Africa in a meaningful way. The sincere speech was very different from that of previous Western presidents visiting the continent; as previous world leaders often visited with promises of more Aid not mentioning much on improving trade relations with African countries. Perhaps the most vital message in the speech was partnering with African nations and promoting trade opportunities; this is a logical direction to ensure the development process. For many years, only Aid seemed to preoccupy African development efforts. Very rarely is the need for investment and trade discussed when it comes to Africa. But the situation is so dire that Aid cannot put a reasonable dent in poverty. Since women account for over 50% and over 60% of the African population are below 24, the quagmire is even more disturbing. How can African women raise positive, ambitious and mentally and physically healthy children in such dire conditions and much more when global leaders constantly remind them that they are poor? Images of the poor African with Malaria, HIV, Tuberculosis, naked and helpless are not very empowering even though it brings in $billions to NGOs. How can any society build a self sustaining economy and raise children to become doctors, economists, engineers, lawyers, teachers, nurses, entrepreneurs and traders when it is constantly reminded that it should be pitied, that its situation is helpless and its people are dying. It is not very constructive when well-intentioned westerners care to the point where it feels as if they are bragging about how they are helping the pathetic Africans. In the words of Senegalese entrepreneur, Magatte Wade, It sometimes comes dangerously close to bragging about how pathetic their Africans are. “My Africans are more pathetic than your Africans" is altruist speaking for "My yacht is bigger than your yacht." Though well-intentioned, it is time to have an elevated vision for Africa; one that is based on logic (empowerment) not pity. It is often forgotten that the West was not built on pity but on free enterprise and competition. And even China, which is fast becoming a global economic power, is not advancing based on band aids and pity parties. According to Oxford Economist, Dambisa Moyo, in the past decade, China, through strategic investments and alliances, has brought 300 million people out of poverty. In a quest for Crude oil and other commodities the continent is known for, China has been building business partnerships with many African countries; building roads, railways, and other infrastructure to secure resources for China’s future. The question becomes, how can African countries, many of which were richer than China a few decades ago, put in a dent on Poverty just as China doing? How can African economies become self sustaining? Part of the answer lies in curing the Dutch disease which has characterized many countries within the continent. The overdependence on commodities has a crippling effect on economies because it causes countries to neglect innovation and promises of a holistic economy. This brings to mind the 1960s crisis in Netherlands that resulted from discoveries of vast natural gas deposits in the North Sea. The newfound wealth caused the Dutch gilder to rise, making exports of all non-oil products less competitive on the world market. Also, in the 1970s, the same economic condition occurred in Great Britain, when the price of oil quadrupled and it became economically viable to drill for North Sea Oil off the coast of Scotland. By the late 1970s, Britain had become a net exporter of oil; it had previously been a net importer. The pound soared in value, but the country fell into recession when British workers demanded higher wages and exports became uncompetitive. According to World Bank, in Nigeria, for example, the oil sector accounts for over 80% of Revenues but benefits less than 1% of the population. The over dependency on Oil since its discovery in the 1950s, has gradually phased out formerly efficient and significant industries such as Agriculture and light manufacturing bases. Nigeria no longer employs enough farmers, horticulturists, biologists, and entrepreneurs given its relapsed agricultural sector which made Nigeria a major exporter of cocoa, groundnuts (peanuts), rubber, and palm oil in the past. This story is not unique to Nigeria alone; Ghana, Ivory Coast, etcetera have the same problems, and have all suffered a massive brain drain as a result; as many Africans have moved into Diaspora in search for greater opportunities. Perhaps African leaders and the world at large need to note that Africa’s most valuable resource is its 1 billion citizenry. That creation of opportunities for excellence through job creating, micro financing, direct investments, and entrepreneurship is much more sustaining than pity. In recent years, Kenya, Rwanda, Uganda, Ghana, and Nigeria, have made a move towards diversification. For example, Dr. Iweala of World Bank noted that; Kenya is fast becoming one of world’s largest exporters of flowers; Nigeria is fast becoming the biggest Movie industry on the continent and 3rd largest movie in the world. According to Dr. Moyo, author of “Dead Aid” more than 15 African countries now have credit ratings, and many financial institutions have under gone major reconstructions, inflation rates have reduced dramatically over the past decade and in general the whole continent has witnessed a 6% average growth in the past 8-10 years. And despite the current global crisis, Dr. Iweala of World Bank expects a 2% growth for many African nations this year. These are the types of improvements that would bring concrete change to a vastly rich continent. Improvements that encourage entrepreneurship and brain gain; as we witness Africans repatriating home. After all said and done, this is what African need. |
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